Day of Reckoning
Lew Rockwell at LewRockwell.com - the criminals in the District of Criminals have pushed off the day of reckoning once again, but they've only delayed the inevitable, and made it worse. The whole house of cards needs to collapse, so that we can build again on a firm foundation.
But the downgrading of a government’s debt from AAA to AA+ can only have triggered a market avalanche if the truth is in fact much worse, and most everyone knows it.
S&P doesn’t have clean hands, of course. It holds a government monopoly, wants higher taxes, and rated crazed housing bonds AAA. But imagine, for just a moment, that US government debt were rated in the same way that municipal bonds or regular corporate debt are. Imagine that government bonds, like normal bonds, carried a default premium. Imagine, in other words, that the Federal Reserve were not in a position to pay everyone from welfare recipients to banksters with newly created money.
Under such actual market conditions, federal debt would not be rated as AA+. It would be worth even less than junk bonds. In fact, it wouldn’t even qualify for a market rating at all, because it would be utterly worthless and the institution that issued it would be in default and the whole rotten apparatus of the state would be seen to be bankrupt at its very core, in every sense.
We know this for one simple reason: There is no way that the government can fund its debt on taxes alone. There would be a revolution in this country in a heartbeat, and, probably, the entire American empire, domestic and foreign, would come crashing down, along with its banking and monetary systems.
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There would be wailing and gnashing of teeth, but there would be no turning back. Within a few months, we would start seeing massive resource shifts and pockets of growth would return. New jobs would be available. New businesses would spring up. New financial firms would displace the old ones. Within a year or 18 months, we would be on a growth path, and this time it would be real and sustainable.